Home prices are beginning to show signs of cooling as buyers have pulled back due to mortgage rates doubling this year, which is starting to convince sellers to lower their sales price.
However, the overall housing supply remains limited as those who purchased homes in recent years at low mortgage rates are staying put. Additionally, many sellers are waiting for interest rates to drop to have a better chance of getting the price they want.
While home prices continue to climb from last year, the price points are not as high as earlier this year, indicating the over-heated housing market is slowing down.
Many housing insiders warn buyers against trying to time the market as the economy wades through this period of uncertainty.“Deciding to buy now or wait is going to depend on the individual buyer’s motivation and situation.
Waiting may not be a viable option,” says Krista Forsberg, a real estate agent at Keller Williams Realty in Edina, Minnesota. “Even if a buyer can push pause on buying to later in the year or 2023, there isn’t likely to be significant improvement in prices or interest rates.”
As we approach the end of 2022, housing experts maintain a watchful eye on the economy, which is still being pulled in all directions by stubbornly high inflation, rising interest rates, the war in Ukraine and Covid-19, to name a few. While housing has been the star of the U.S. economy the last few years, there are signs of wear. For instance, the 30-year fixed mortgage hitting a year high at 7.08% by late October, making it harder for buyers to access affordable housing.